Woolworths ditches Homebrand for new private label range

Woolworths supermarket group is saying goodbye to its Homebrand private label range and replacing it with another of its private label brand.

Homebrand was established by Woolworths in 1983 and developed an early reputation for offering the cheapest option within each product category.

A Woolworths spokesperson said Homebrand will be merged into private label range known by the name ‘Essentials’.

“We have been reviewing the products in all of our own brand ranges to ensure we deliver even greater quality and value for our customers,” the spokesperson for Woolwroths said.

“Part of this review will see our current value ranges, Homebrand and Essentials, consolidated into one improved value range called Essentials,” the spokesperson added.

Over the past several decades Woolworths has introduced different layers of branding to its private label offerings. Beyond its Homebrand and Essentials range the supermarket has been also selling parts of its private label range under either “Woolworths Select” or “Woolworths Gold”, both of which are positioned as higher-priced, better quality products than Homebrand and Essentials products.

Why the move to do away with Homebrand?

The decision to move on from Homebrand has today been described by some analysts as an attempt to keep up with Aldi’s popular private label brands.

Commentator Allen Roberts from Strategy Audit who has more than 35 years’ experience in the Australian food industry, says it shows Woolworths is trying to fix a larger problem.

“The challenge Woolworths has with Aldi is much deeper than just the perception that the old Homebrand ‘brand’ is crap, it is about the perception of the whole Woolworths brand,” Roberts told Australian Food News.

“So far, Woolworths has missed the subtle market changes that have been evolving, but beyond talking about them, their actual behaviour has not changed,” he said.

Roberts says ditching Homebrand could be the first of needed changes at Woolworths but he was not sure if it was going to be more than a cosmetic fix.

The change in direction for Woolworths’ private label brands has come one month after Brad Banducci was announced as new CEO for the group.

At the time of his appointment Woolworths revealed a net profit after tax of AUD$925.8 million for the six months ended 3 January 2016. Although Woolworths still has more supermarket stores than any other Australian retailer, this figure was a 33.1 per cent drop on the same corresponding period in 2015.